Contributor, Korn Ferry Institute
More Money Isn’t Enough
Daniel Goleman is author of the international best-seller Emotional Intelligence and of the forthcoming Optimal: How to Sustain Personal and Organizational Excellence Every Day. He is a regular contributor to Korn Ferry.
It’s time to rethink what motivates employees.
According to payroll-services company ADP, promotions—and the increased earnings that usually accompany them—might be having a negative impact on employee turnover. Analyzing the job histories of more than 1.2 million people from 2019 to 2022, ADP found that within a month after their first promotion, 29% of people had quit their company. Had they not been promoted, only 18% would have left. This means that over three years, promotion led to a nearly two-thirds increase in the risk of an employee departing from their workplace.
While money and status used to be the golden ticket to employee retention, modern employees are less unanimously motivated by such things. Instead, intrinsic motivation has become paramount. Rather than focusing on rewards and outcomes, leaders are being asked to zero in on the things employees find inherently satisfying – the things that light them up from the inside, out.
One of these things is learning – not just formally through coursework and education, but informally through experiential opportunities and mentorship. As Korn Ferry recently highlighted, the future of promotions and pay increases isn’t as stable as it once was. Instead of focusing on moving up the career ladder, employees might be better off taking a “lattice approach” – looking for roles they can take on at their level or lower that provide them with critical growth, skill development, networking and exposure to mentors that can ultimately boost their career. “The old way of thinking about getting a promotion every year or two is antiquated,” says Dan Kaplan, senior client partner in Korn Ferry’s CHRO practice.
According to Mark Royal, senior client partner for Korn Ferry Advisory, one of the ways for employees to embrace the lattice approach is to focus on work they love. This means reflecting on their strengths, interests, values and what energizes them. Then employees can use that information to consider how they can more meaningfully plug into the organization.
This approach not only draws on decades of research on intrinsic motivation, but also is congruent with the trends leaders are seeing among Gen Z, the newest addition to the workforce. LinkedIn says that Gen Zers are their fastest growing user demographic, accounting for nearly 22% of the networking site’s online activity. Leveraging their technical know-how and creativity, Gen Zers are building their networks, connecting with mentors, and experimenting with diverse career paths, all while exposing themselves to a diverse array of organizational cultures. At the same time, they are champions of purposeful work – vetting jobs, leaders, and opportunities in terms of how well they align with their values around advancing environmental and societal wellbeing.
David Ellis, Korn Ferry’s vice president for global talent acquisition transformation in North America, says the trend we see among Gen Z is a microcosm of the broader changes in the talent market. Not only are these young workers more likely to abandon college plans to enter the job market early, but they also are incredibly resourceful at building their own career paths.
For leaders, this affirms that titles and traditional accolades won’t be enough to secure the employees of the future. More important than promotions and pay is to appeal to people’s deeper needs around learning and purpose. In neuroscience terms, we can call this appealing to the brain’s seeking system – the neural pathways that hard-wire us for curiosity and meaning. While money might rule the world in some ways, we are wired to want more.
Co-written by Elizabeth Solomon